New York June 9 2022: Freeport LNG, operator of one of the largest U.S. export plants producing liquefied natural gas (LNG), will shut for at least three weeks following an explosion at its Texas Gulf Coast facility.
The fire roiled U.S. natural gas markets on Wednesday and the impact is likely to spread through Europe and Asia markets, analysts said.
Freeport LNG, which provides around 20% of U.S. LNG processing, disclosed the shutdown late on Wednesday after appraising damage to the massive facility.
Its closure takes away a major supplier to markets already strained by European buyers shunning Russian LNG over its invasion of Ukraine – actions that Moscow calls a “special operation” – and by resurgent demand in China, analysts said.
“This is a significant production outage at a major U.S facility,” said Alex Munton, director of global gas and LNG at research firm Rapidan Energy. Freeport LNG ships about four cargoes per week and a three-week shutdown will take at least 1 million tonnes of LNG off the market, he said.
“It’s going to mean one thing: shortages. The competition for spot LNG is going to drive global LNG prices higher,” Munton said.
The plant can process up to 2.1 billion cubic feet of natural gas per day (bcfd), and at full capacity can export 15 million tonnes per annum (MTPA) of the liquid gas. U.S. LNG exports hit a record 9.7 bcfd last year, according to the U.S. Energy Information Administration (EIA).
